Five-star JMP Securities analyst David Scharf upgraded buy now, pay later (BNPL) lender Affirm Holdings (AFRM) to Market Outperform after calling it a “long-term secular winner” that is set to benefit at the expense of the credit card industry. He cited the growing adoption of BNPL solutions for everyday spending and Affirm’s stronger loan platform compared to competitors.
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Scharf is bullish despite Affirm’s 47% stock jump in the past three months. He pointed to factors like a more favorable regulatory environment, faster-than-expected progress toward GAAP profitability, improved unit economics, rising user engagement, and momentum from new partnerships and market expansion.
Currently, JMP has a $78 per share price target, which equates to a nearly 19% upside from current levels. It’s worth noting that, so far, Scharf has enjoyed a 53% success rate on his stock ratings, with an average return of 13.3% per rating.
JMP Is Not the Only Firm with a Positive Outlook
In addition, JMP is not the only firm with a positive outlook. Indeed, Jefferies — led by John Hecht, who is also a five-star analyst — upgraded Affirm to a Buy rating from Hold and raised its price target to $82 from $70. The upgrade is due to strong recent growth, improving profit margins, favorable credit conditions, and better interest rate trends.
The firm believes that Affirm could see revenue and transaction volumes grow by 35% through FY27 if current market trends continue and by as much as 50% if growth accelerates. It also highlighted Affirm’s attractive valuation compared to its peers.
Is Affirm Holdings a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AFRM stock based on eight Buys, nine Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 36% rally in its share price over the past year, the average AFRM price target of $64 per share implies 1.8% downside risk.
